JMAR Technologies Awarded Additional $3.8 Million Contract for Semiconductor X-Ray Lithography Source Development

Funding Will Help Demonstrate Viability of Technology

San Diego, CA. JMAR Technologies Inc. (Nasdaq NM: JMAR), a provider of precision products for the microelectronics industry, announced today that it has been awarded an additional $3.8 million of contract funding from the U.S. Army Research Laboratory (ARL), sponsored by the Defense Advanced Research Projects Agency (DARPA), to continue development of the company s PXS laser plasma X-ray point-source technology for advanced semiconductor lithography applications.

"Lithography, a photographic process wherein an advanced, high-intensity light source is used to copy a circuit design onto a semiconductor chip, is one of the most critical steps in the production of semiconductors," commented John S. Martinez, Ph.D., JMAR s chairman and chief executive officer. "It is the fundamental process in producing integrated circuits (ICs) and is the pacing technology in the industry s relentless drive toward smaller, more powerful circuits for faster computing, broader-band telecommunications and a multitude of other high value applications."

Dr. Martinez continued, "The need for smaller, more powerful semiconductors continues to intensify and with that so does the need for more advanced manufacturing solutions to make them. To produce the high performance electronic systems of tomorrow, manufacturers need cost-effective ways to squeeze more electrical circuits into smaller spaces. The smallest semiconductor circuit feature sizes in full-scale production today are approximately 0.18 micron in width. Most of them are produced using established deep ultraviolet (DUV) optical lithography techniques. New processes based on advanced optical, electron beam and X-ray technologies have been under development for many years to succeed the DUV systems as they approach their size reduction limits. All of these techniques have demonstrated their ability to surpass present circuit density limitations, thereby paving the way for production of new generations of much higher performance semiconductors having circuit feature sizes of 0.07 microns, or smaller.

"Recent industry studies have indicated that the projected costs of the advanced optical lithography technology needed to produce many of these finer feature size circuits have soared dramatically because of the increased complexity and limited availability of the highly refined optical components required to achieve the desired performance levels," added Dr. Martinez.

"As the trend toward smaller circuit sizes continues, we believe a lithography system using JMAR s PXS light source, which does not require expensive optics, could become increasingly attractive to semiconductor manufacturers as they strive to balance the demand for ever-smaller chips with the need to curb the skyrocketing cost of producing them," Dr. Martinez noted.

Richard M. Foster, president of JMAR Research Inc. (JRI), the JMAR division developing the company s PXS light source, added, "DARPA funding for our X-ray Lithography (XRL) program over the past two years has enabled JMAR to establish a substantial technological foundation for our PXS lithography light source. These advances include the upgrading of our Britelight(TM) laser so it could produce the beam quality necessary for efficient XRL in a module only two to three cubic feet in size capable of reliably producing the 75 watts to 125 watts of short pulse laser power required for that process. We have also routinely generated laser-to-X-ray conversion efficiencies in the 3 percent to 6 percent range (depending upon the laser light wavelength) and, with the demonstrated improvements in X-ray beam collimation technology, we have increased the X-ray power incident on the mask/wafer lithography target 20 to 40 times over this two-year period. I expect that these performance increases will eventually transfer directly into an equivalent improvement in wafer processing throughput rates based on lower x-ray output levels than we previously expected would be required."

Dr. Martinez concluded, "This new contract funding should enable us to complete a four-beam PXS module before the end of this year to power a viable, entry-level production lithography device. We believe that module will become the basic building block for a multi-module system capable of commercially-viable IC processing rates of both GaAs and silicon wafers having feature sizes of 70 nanometers, or less." JMAR Technologies Inc., a semiconductor industry-focused company, is a leading developer of proprietary advanced laser and X-ray light sources for high-value microelectronics manufacturing and metrology. It is also a fabless provider of high performance integrated circuits for the rapidly growing broadband telecommunications market and other microelectronics applications. In addition, JMAR manufactures precision measurement, positioning and light-based manufacturing systems for inspection and repair of semiconductors and continues to play an important role in adapting its precision semiconductor manufacturing technology to the fabrication of advanced biomedical and optical communications products.

The statements regarding JMAR s expectations for the successful development and introduction of new X-ray and other advanced light products and future sales and potential business opportunities are forward-looking statements based on current expectations that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements. These risks include the failure of future orders to materialize as expected, delays in shipment or cancellation of orders, failure of acceptance of new products, failure of advanced technology and new intellectual property to perform as predicted, the failure of pending patents to be issued, and the other risks detailed in the company s Form 8-K filed on February 15, 2000, its 1999 Form 10-K and other reports filed with the SEC.

Contact: JMAR Technologies Inc. Dennis E. Valentine, CFO Tel: 858/535-1706 http://www.jmar.com